As we all know, the world is in uncertain times.
Ultimately, starting a business could be deemed even riskier than ever before. We’ve all heard about the “standard” risks and failure rates associated with new companies, but throw a poor economy and potential recessions into the mix, and things step onto a whole new level.
Today’s post isn’t going to hold all of the answers for your journey, but we’ll now look at some of the key things you should consider if you are taking the plunge and starting a new venture in these uncertain times.
Start small
If you’ve read any worthwhile business journal, you’ll know everything about the pitfalls of growing too fast.
If you also happen to be in a poor economy, the risks intensify again.
What’s the moral of the story? Start small, and tread carefully. Sure, the competition might be less fierce during these times as others drop out, but that doesn’t mean to say you should be looking to gobble up market share at any cost.
Remember, every direct cost tends to have an indirect one. A smaller office might result in lower insurance fees. A bigger warehouse will require more workforce. The list can go on.
Try and lower your fixed costs whenever possible and avoid long-term contracts. This will at least allow you to slowly expand if the need arises.
Consider your target market more than ever before
When times are tough, people’s spending habits change. Some sectors will do better than others, so you should target those more likely to withstand a downturn.
Luxury items, for example, might be one of the first things to go when people are feeling the pinch. In contrast, people might be more inclined to buy things deemed as necessities.
Think about how your product or service might be affected by a change in spending habits, and consider your target market carefully.
Be realistic
It’s easy to get caught up in the excitement of starting a new business, but it’s important to be realistic about your situation.
The economy might be against you, and you might be up against some tough competition.
You need to be realistic about your chances of success and be prepared for the possibility that things might not go to plan. This doesn’t necessarily mean failing outright, but forecasting at lower levels can significantly help your plight.
Have a contingency plan
No matter how well you plan, there’s always the possibility that things might not go to plan. It’s essential to have a contingency plan in place so that you can react quickly if the worst does happen.
Think about what you would do if sales started to drop or if one of your key suppliers went out of business. These are the sorts of steps to take in any economy, but it’s even more crucial when times are tough.
Don’t give up
Finally, it’s important to remember that starting a business is never easy. Even in the best of times, there will be challenges and setbacks.
The key is not to give up and keep going even when things are tough. Of course, there will come a limit – and it’s important to understand where that line is. However, simply understanding that it’s more challenging to achieve your goals during these times can give you more motivation to continue.
